Broadcasting (Limit on the Holding of Licences to Provide Television Multiplex Services) Order 2001

9.7 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 11th December be approved [First Report from the Joint Committee].

The noble Lord said: My Lords, this order revises the limits set out in paragraph 5 sub-paragraphs (1), (3), (4)(a) and (4)(b) of Part III of Schedule 2 to the Broadcasting Act 1990, as amended. The Secretary of State is empowered to adjust the limits by paragraph 5(5)(a) of Part III of Schedule 2 to the Act.

Perhaps I may take your Lordships back to first principles. What are multiplexes? Of course, we are all aware that we have entered the age of digital

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broadcasting. The multiplex is a central feature of digital terrestrial television. A multiplex is a block of frequencies that can carry several digital channels. A multiplex enables many more channels to be carried than was previously the case with analogue signals. There are different multiplexes for digital radio and digital television. There are currently six digital terrestrial television multiplexes. Each is capable of carrying at least six television programme services. One of these multiplexes is reserved for the BBC, and the remaining five are licensed by the Independent Television Commission.

The Broadcasting Act 1996 stipulates that no person, which includes a company or business, can hold more than three licences to operate one of these multiplexes. The order raises this limit on multiplex licences that a person can hold from three to six, which is more than the number available. Therefore, it effectively removes the current restrictions on the number of licences that can be held. The justification for doing this is that the limit as it currently stands prevents developments within the industry which the Competition Commission has cleared on competition grounds.

The Competition Commission last year investigated several proposed ITV mergers, involving United News and Media, Granada Media and Carlton. In reaching its decision on which were permissible and which were against the public interest, the Competition Commission decided that the limits on the holding of multiplex licences made no difference to its overall conclusions. However, as the limit may have been exceeded by the mergers then proposed which meant that the groups would have had to sell off--that is, divest--subsidiaries, the Secretary of State for Culture, Media and Sport decided to act to remove the restriction on merger activity, which, in the view of the Competition Commission, was irrelevant in competition terms.

That decision, although taken as a result of the Competition Commission's report, was a neutral one and should not be taken as favouring any one company. The Secretary of State's announcement was made in advance of any final ITV merger activity, when it was still unknown when, or indeed whether, any of the proposed mergers would take place.

As primary legislation would be required to remove the limits from the statute book altogether, the Secretary of State has chosen to make use of a statutory instrument that would have the effect, at least for the present, of removing current restrictions. This route was agreed by the opposition parties in the House of Commons.

The order preserves the scheme of the legislation by stipulating the maximum number of licences that a person can hold and then specifying the extent of the interest which that person may have in additional licences. The scheme of the Act means that to have the effect of removing all restrictions on multiplex ownership, the numbers specified in the order must be

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higher than the number of licences currently available. Therefore, the order refers to a hypothetical seventh and eighth multiplex.

We now know more about the way that the industry has developed than we did when the legislation was drawn up in 1996. Competition is between, rather than within, digital platforms--that is to say, competition is between satellite, cable and terrestrial platforms, rather than between commercial operators on the digital terrestrial platform. Given the Competition Commission's satisfaction that the current restrictions on the holding of these licences made no difference to their deliberations last year, the limits can safely be adjusted; and, in effect, removed. The principle is supported by the Independent Television Commission.

The order will help digital terrestrial television to develop as a mature, quality platform. I commend the order to the House.

Moved, That the draft order laid before the House on 11th December be approved [First Report from the Joint Committee].--(Lord McIntosh of Haringey.)